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Renewable target won't be met if carbon tax dumped

SALLY SARA: The Federal Government's climate change adviser says national renewable energy targets should not be dumped. The Climate Change Authority say the target of 20 per cent of power coming from green sources by 2020 should remain unchanged. It's rejected criticism that it's leading to unnecessarily high electricity costs for Australian households.

But the authority admits if the Coalition is elected next year and the carbon tax is dumped there's a significant chance the target won't be met.

From Canberra, Samantha Hawley reports.

SAMANTHA HAWLEY: Renewable energy currently accounts of 10 per cent of Australia's power generation. By 2020, the independent Climate Change Authority wants that figure to reach 20 per cent, or 41,000 gigawatt hours a year. And after a lengthy review it's found that's a target worth sticking to.

CLIVE HAMILTON: Well the authority decided that the renewable energy target policy is working well. It's pretty much meeting its objectives.

SAMANTHA HAWLEY: Clive Hamilton is a member of the authority. He says all the arguments for and against change were considered, but in the end the status quo was the best way forward.

CLIVE HAMILTON: It's very important to send a message of market certainty to the emerging renewable energy industries and changing the target now would entail significant risks and increase the risk premiums for renewable energy projects.

SAMANTHA HAWLEY: And projections are better than first thought. The authority believes a fall in energy use could mean renewable energy will account for 26 per cent of all power by 2020.

JAI MCDERMOTT: We support the role for renewables in Australia's energy mix, we just don't believe that the RET (renewable energy target) is sound policy.

SAMANTHA HAWLEY: The coal industry association was one of the groups that lobbied for a cut to the target. Its general manager is Jai McDermott.

JAI MCDERMOTT: I guess the question is what is the fair price to impose on Australian taxpayers? Are we prepared to pursue renewables at any cost?

SAMANTHA HAWLEY: The coal association argues the renewable energy target, or RET, contributes to unnecessarily high electricity costs for households and businesses and it's been made largely redundant by the carbon tax. But that's not the case, according to Clive Hamilton.

CLIVE HAMILTON: I mean in truth, the most striking thing about the modelling is just how low the costs are. Certainly compared to the kinds of claims that have been made about the excessive burden the RET imposes on industry and on consumers.

SAMANTHA HAWLEY: The authority's found the target for renewable energy would result in an annual increase of between $12 and $64 to the average household's electricity bill in 2020, and predicts it's more likely to be at the lower end of that scale.

CLIVE HAMILTON: The cost of the RET to the average Australian household is an increase of around about 3 per cent on their electricity bills.

RON BOSWELL: It disappoints me but it doesn't surprise me. I can't imagine what else the Climate Change Authority would be - it's hardly going to recommend its own demise.

RON BOSWELL: I suspect I have a great deal of support in the Coalition.

SAMANTHA HAWLEY: On the other end of the argument, the Greens say the target should have been strengthened. The Greens MP, Adam Bandt:

ADAM BANDT: They are treading water as to where to go next on renewable energy and that's disappointing.

SAMANTHA HAWLEY: The Greens say Australia needs to be 100 per cent powered by renewable energy by the middle of the century.

ADAM BANDT: And to do that, we're going to need to set a target of 50 per cent renewable energy by 2030.

SAMANTHA HAWLEY: The Climate Change Authority does acknowledge if the Government changes next year and Tony Abbott delivers on his promise to dump the carbon tax, the target won't be met.

Clive Hamilton again:

CLIVE HAMILTON: Well the authority's modelling shows that in that circumstance, there is a significant risk that the renewable energy target would not be met.

SAMANTHA HAWLEY: The RET cannot be successful unless the carbon tax is in place, is that what you're saying?

CLIVE HAMILTON: No, but the carbon tax and the RET interact with each other.

If there is no price on carbon, then the RET has to work harder in order to achieve its goal of generating 41,000 gigawatt hours of renewable electricity, and the modelling suggests that in that circumstance, although it will depend on other circumstances as well, the full 41,000 gigawatt hours would not be met. It would fall some way short of that.

SAMANTHA HAWLEY: The Government now has six months to respond on the recommendations. The Climate Change Minister, Greg Combet, says that will happen early next year.